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PFAS: are these ‘forever chemicals’ akin to the new asbestos risk?

March 2025

Introduction

Initially formulated in the 1930s, Per- and polyfluoroalkyl substances (PFAS) chemistry has been commonly used in the manufacturing process of products used by consumers and the industry. Often referred to as “forever chemicals”, PFAS are a large group of synthetic chemical compounds that do not occur naturally and are characterised by a unique structure of carbon atoms surrounded by fluorine atoms, forming highly stable carbon-fluoride bonds.[1] This stability gives PFAS a range of valuable characteristics, including strong resistance to heat and degradation, as well as repellent properties against oil and water making them desirable for nearly all products across every sector.

However, the very characteristics that make the chemical compounds so effective are what also make them a serious threat to human health and the environment. These compounds persist for decades without breaking down, earning them the name “forever chemicals”. Long-term exposure to certain PFAS has been linked to serious health conditions and issues, including cancers, developmental disorders, hormone or immunity disruption, and liver damage. Although PFAS chemicals have been widely used for over 90 years, significant research into their environmental and health impacts only began to gain traction in the early 2000s. As public awareness grew, along with increased government regulations and media attention, some manufacturers began voluntarily phasing out PFAS, replacing them with short-chain alternatives or non-fluorinated compounds instead. However, with nearly a century of contamination and a lack of strong global regulations and management, PFAS chemicals (also known for their mobility) have spread throughout the environment, contaminating nearly everything from our drinking water to the soil we grow our crops in.

In this article, we consider PFAS chemicals and developments in the UK and US markets predominantly from a litigation and insurance perspective. In our next update, we will consider the use of PFAS specifically in the construction industry, as well as the potential legal and contractual risks that specifying or using products containing PFAS chemicals might have in practice or the implications of working on contaminated sites.

Removal and destruction of PFAS

The widespread presence and durability of PFAS in the environment pose a significant challenge, as these chemicals are notoriously difficult to remove or destroy. Their persistence in nature, combined with the extensive scale of contamination and the limited knowledge about the toxicity of thousands of PFAS compounds used worldwide, underscores the gravity of the issue and the complexities involved in addressing them.

In the US alone, Milliman, an independent actuarial and consulting firm, estimated in July 2024 that remediating PFAS contamination in drinking water systems could cost between $120 and $175 billion.[2] The cost of attempting to remove and destroy PFAS from the UK’s environment would likely run into hundreds of billions of pounds, with the task made even more complex by the scale of contamination and the significant technical hurdles involved.

According to online sources, a study conducted and sponsored by the Environmental Protection Agency (EPA) in the US in 2022 assessed the effectiveness and readiness of non-combustion-based technologies for breaking down PFAS in various sources. The study reportedly concluded that, apart from the expensive high-temperature incineration, there were limited viable technological solutions to effectively break down PFAS, and more research was needed to develop cost-effective, scalable, and environmentally sustainable alternatives for addressing PFAS contamination in various media or substances. More information on PFAS research is available via the US EPA’s website[3].

PFAS vs asbestos – posing similar challenges for insurers?

The comparison between PFAS and asbestos has garnered significant attention in the insurance industry, largely because both substances were widely used in a variety of everyday products, resulting in extensive exposure to large segments of the population. Asbestos, for instance, was commonly incorporated into products such as pipe insulation, ceiling tiles, flooring, and roofing shingles, while PFAS have been used in a diverse range of applications, including firefighting foam, stain-resistant textiles, cosmetics, and food packaging. The widespread use of both substances means that a significant portion of the population would have been exposed to them, whether through direct contact or environmental contamination.  If a similar scenario unfolds with PFAS exposure, insurers could face another substantial financial burden, potentially leading to risks, major claims costs, long-term financial implications and reputational concerns for the industry. This comparison underscores the serious risk that PFAS contamination could present to insurers, particularly as the scale of exposure and the potential health risks become more apparent.

Unlike asbestos, which has a direct and well-established link to mesothelioma, a cancer affecting the lining of certain organs, no specific disease has yet been conclusively tied to PFAS exposure. However, the potential health risks remain a significant concern, as studies have identified a “probable link” between PFAS exposure and illnesses such as testicular and kidney cancer, among others.[4] While these health risks are still under active investigation, the scientific understanding of PFAS-related diseases is still evolving. As a result, the legal foundation for PFAS-related personal injury claims is currently more speculative compared to the well-documented asbestos cases. Despite this, PFAS related litigation has surged in the United States over the past decade, with thousands of lawsuits filed and settlements reportedly reaching hundreds of millions of dollars.[5] This growing trend is expected to influence similar legal actions in the UK, where insurers may soon face significant liability challenges as PFAS-related health or environmental and pollution concerns continue to gain attention. As the scale of exposure and the potential links to the environment and health issues become clearer, insurers could find themselves confronting a financial burden on par with the long-term costs seen in the asbestos-related litigation.

Example case study

In the UK, late last year, residents of Bentham were considering launching the country’s first reported PFAS-related legal action against a firefighting foam manufacturer that produced PFAS-containing products.[6] PFAS was reportedly discharged into the water system through runoff from testing firefighting foams at Angus Fire’s factory, which was sent to wastewater lagoons near residential homes. Until 2020, the lagoons discharged contaminated water into the sewer system, and eventually the surrounding water system, under a permit from the local water company. PFAS levels in the surrounding water and soil were recorded at a 1,199,000 nanograms per litre (ng/L), vastly exceeding the Drinking Water Inspectorate’s PFAS limit of just 100 ng/L for water companies in November 2024.[7] Residents have reportedly sought legal assistance, alleging that PFAS exposure has harmed their health, damaged the environment, and devalued their property. If this landmark case proves successful, it could mark a significant turning point, potentially paving the way for a wave of further PFAS-related claims across the UK.

This case represents a crucial example of how the growing concerns over PFAS exposure are translating into legal action, and could set a major precedent for future litigation, much like the rise of asbestos-related lawsuits in the past. As such, this case underscores the potential for a financial burden on insurers and the broader legal landscape in the UK, where PFAS-related claims may soon become a prominent issue.

Insurer’s actions

In response to these growing risks and potential liabilities, insurers have been adjusting their strategies by adopting more cautious approaches to managing PFAS-related exposures. The Lloyd’s Market Association (LMA), for instance, introduced exclusion wording for PFAS in recent policies, which are being  increasingly adopted across the market. This shift highlights the industry’s proactive efforts to reduce the exposure to PFAS-related claims and to mitigate the financial risks associated with the pollutant. However, while these exclusions may limit future liabilities, the challenge of dealing with legacy policies remains unresolved. Given the scale of historical PFAS use and its long-lasting environmental and health effects, insurers face a dual challenge: managing the liabilities arising from legacy policies while safeguarding against future claims. Together, these developments reflect the growing urgency for the insurance industry to adapt to the rise in PFAS litigation and the significant risks it poses to the UK market.

Building on this cautious approach, the Lloyd’s Market Association introduced two key model clauses on 29 July 2022, LMA5595[8] and LMA5596[9]. These exclusions are specifically designed for liability insurance and liability reinsurance policies, respectively. They include a broad exclusion clause that applies to various liability policies, such as public liability, product liability, and environmental liability. The clauses provide the following:

• ”This POLICY does not cover any claim for actual or alleged loss, liability, damage, compensation, injury, sickness, disease, death, medical payment, defence cost, cost, expense or any other amount, directly or indirectly and regardless of any other cause contributing concurrently or in any sequence, originating from, caused by, arising out of, contributed to by, resulting from, or otherwise in connection with any PFAS.

 

• For the purposes of this Exclusion, loss, liability, damage, compensation, injury, sickness, disease, death, medical payment, defence cost, cost, expense or any other amount, includes, but is not limited to, any cost to clean-up, detoxify, remove, monitor, contain, test for or in any way respond to or assess the effect of any PFAS”.

PFAS is defined. LMA5596 contains an additional paragraph which effectively reverses the onus of proof and places this on the Insured entity (i.e., ”If UNDERWRITERS allege that this Exclusion applies to any claim under this POLICY the burden of proving the contrary shall be upon the INSURED”).[10] This is an important point to note in the context of any such future claims under these policies. It should also be remembered in terms of the evidence required to substantiate a future claim under the policy and to demonstrate coverage.

The introduction of LMA5595 and LMA5596 represents a significant step in the industry’s efforts to proactively address PFAS-related risks. These clauses reflect the increasing regulatory pressures, complex liability implications, and growing uncertainty surrounding PFAS claims. However, it is also likely that insurers’ approaches to PFAS exclusions will vary depending on factors such as how PFAS are defined within policy terms, the scope of exclusion wording, and the market’s appetite for risk as new claims and regulatory developments emerge.

As PFAS litigation evolves, similar exclusions may begin appearing in other types of policies, such as professional indemnity, further impacting the insurance industry. The clauses mentioned above illustrate how insurers are currently addressing the challenges of this emerging area of liability, seeking to protect their portfolios while navigating an uncertain legal and regulatory environment.

Conclusion

The rising awareness of PFAS-related risks, coupled with their pervasive environmental presence and potential health implications, poses a significant challenge to insurers. The parallel to asbestos highlights the substantial financial liabilities that could arise as PFAS litigation evolves. The proactive adoption of exclusion clauses, such as LMA5595 and LMA5596, signals the industry’s recognition of this emerging threat, but managing legacy policies and navigating an uncertain regulatory and legal landscape remain critical hurdles. As PFAS contamination continues to gain attention, insurers will need to balance risk mitigation with the potential for long-term financial exposure, highlighting the profound impact these “forever chemicals” could have on the insurance sector.

Beale & Co’s specialist lawyers are experienced in advising on matters throughout a project’s lifecycle, including on legal points linked to construction and environmental insurance. If you’re interested in finding out more about the issues covered in this article or wish to discuss any matters arising, please contact Nathan Modell and Michael Salau.

For more information on wider environmental issues or key trends impacting the construction, engineering, and infrastructure sectors and how these might impact your business, please visit our website or contact your Beale & Co lawyer.

[1] Per- and polyfluoroalkyl substances (PFAS) – ECHA (europa.eu) undated

[2] Milliman PFAS liability estimate, pt. 1: Water district remediation, 24.07.2024

[3] Research on Per- and Polyfluoroalkyl Substances (PFAS) – US EPA, undated

[4] The Science of PFAS Exposure and Effects on Human Health

[5] Companies Face Billions in Damages as PFAS Lawsuits Flood Courts

[6] Town brings legal case over ‘forever chemicals’, BBC News, 20.11.2024

[7] Written questions and answers – Written questions, answers and statements – UK Parliament

[8] PERFLUORINATED COMPOUNDS, PERFLUOROALKYL AND POLYFLUOROALKYL SUBSTANCES (PFAS) EXCLUSION NO. 1 (For use on liability (re)insurance policies) – LMA5595 PFAS Exclusion No. 1.pdf, 29.07.2022

[9] PERFLUORINATED COMPOUNDS, PERFLUOROALKYL AND POLYFLUOROALKYL SUBSTANCES (PFAS) EXCLUSION NO. 2 (For use on liability (re)insurance policies) LMA5596 PFAS Exclusion No. 2.pdf, 29.07.2022

[10] PERFLUORINATED COMPOUNDS, PERFLUOROALKYL AND POLYFLUOROALKYL SUBSTANCES (PFAS) EXCLUSION NO. 2 (For use on liability (re)insurance policies) LMA5596 PFAS Exclusion No. 2.pdf, 29.07.2022

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